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Verizon may gobble up Diet iPhone

New iStuff would be useless outside US, though

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Apple is close to an agreement with Verizon Wireless to launch two new Apple products this year: a cut-down iPhone and a larger device dubbed a "media pad" - although they may not be much use to anyone outside the US.

According to Business Week, the story emanates from two sources identified as "familiar with the matter", and is backed up with an assertion that the Verizon CEO admitted speaking to Steve Jobs on the subject. But any devices launched by Verizon would need to support CDMA technology - making them incompatible with most of the rest of the world.

There aren't a lot of details on the products themselves: one is apparently an "iPhone lite", while the other is a larger device with a full face touch-screen and dubbed a "media pad". One person, who has apparently seen the media pad, reports: "We are talking about a device where people will say, 'Damn, why didn't we do this?' Apple is probably going to define the damn category."

One or two people have, of course, thought of media pads before, but Apple is extremely good at bundling up and branding old ideas in clever ways.

But switching to CDMA would be expensive, and would leave Apple with a product only really suited to the North American market, which isn't a good fit with the company's aspirations. Business Week notes that these negotiations could simply be a lever to extract more money, and control, out of AT&T as the exclusive deal for the iPhone comes to an end. ®